Distilling Guyana’s Oil and Gas Regulatory Framework: The Introduction

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By Chevy Devonish

ExxonMobil Guyana Limited (ExxonMobil), and its partners Hess and CNOOC started oil and gas exploration in Guyana in 2008, and the first significant discovery, Liza-1, was made in 2015.

In his 2024 budget speech, Dr. Ashni Singh, Senior Minister with responsibility for Finance, told the National Assembly that in 2024, approximately US$1.2 billion (around a quarter of the US$5.5 billion 2024 budget) is expected to come from revenue from Guyana’s share of profit oil and royalties, and that through 2027, approximately US$5 billion of expenditure is expected to be financed by revenue from the sale of Guyana’s share of profit oil and royalties.

In February, the National Assembly passed the Fiscal Enactments (Amendment) Act 2024 (Act 2 of 2024), which, among other things, has amended the Natural Resources Fund Act (Act No. 19 of 2021) to increase the amount of funds it can, and ultimately will draw down in 2024, and thereafter. 

It is therefore not surprising that media outlets in Guyana cover virtually every detail of Guyana’s oil and gas sector. These reports include new oil finds, the commissioning of new FPSOs, the creation of new Chambers of Commerce, the sale of Guyana’s share of profit oil, and how much Guyana expects to earn and or spend from its share of profit oil.

Much less, however, is known about the laws constituting the legal framework which regulates Guyana’s oil and gas sector (I use the term “legal framework”, as opposed to “legislative framework” in recognition of the fact that aspects of our oil and gas sector, such some disputes which will inevitably flow therefrom, are governed by a combination of local, and international law, such as arbitration law). This is as true for industry-insiders as it is for those who do not work in the oil and gas sector.

Sure, there are persons who work in, around, and outside of the oil and gas sector who are familiar with the oil and gas legal framework because their jobs demand it. But this cannot be said about the vast majority of industry insiders and outsiders.

In any case, even those who are aware of the existence of relevant legislation lack the ability to correctly interpret and apply those laws. 

This dearth of knowledge of the oil and gas regulatory framework and or how they are to be interpreted and applied is part of a larger issue with legal literacy in Guyana.

As a former journalist covering all things politics, a lecturer of politics, and law at the University of Guyana, and now an attorney-at law specializing in litigation, advice, and legislative analysis, I have seen, and continue to see that even senior functionaries in the public and private sector, much less junior functionaries, are often unaware of relevant statutes, statutory provisions, and, and or, how they are to be interpreted and or applied. This is true even regarding provisions which outline the functions and powers of these functionaries.

Further, many Guyanese have little to no knowledge of the laws which impact their everyday life, such as, for example, the Wills Act, Cap 12:02, the Motor Vehicle and Road Traffic Act, Cap 51:02, and the fundamental human rights provisions enshrined in, and protected by the Constitution of the Cooperative Republic of Guyana, Cap 1:01 (“the Constitution”).

Indeed, when the Government of Guyana wanted to acquire private property to build a new harbor bridge, or the gas to shore project it was, to a large extent, Article 142 of the Constitution, not just Government’s good-will, which mandated that those property owners receive fair compensation. The Acquisition of Lands for Public Purposes Act, Cap 62:05, another little-known piece of legislation, was also used in the process.

Unfortunately, however, there is a lack of resources aimed at educating stakeholders, including ordinary Guyanese, on important laws in a way which makes it easy for them to understand.

This realization sparked my desire to educate Guyanese about the laws of Guyana. I have embarked in various initiatives to accomplish this feat, but this is my most recent.

With his column, I intend to outline, and then, in detail, break down the entire legal architecture which directly or indirectly regulates Guyana’s oil and gas sector. Quite often, legislation regulating the oil and gas sector in Guyana are viewed in isolation, and sometimes they are ignored altogether. 

Do all relevant stakeholders appreciate, for example, that The Maritime Zones Act, Cap 63:01 and the United Nations Convention on the Law of the Sea, establish Guyana’s EEZ (200 nautical miles outward from the baseline of Guyana’s territorial sea), in which Exxon’s active projects are located? Do we know that this interplay of local and international law forms the basis of Guyana’s sovereign claim (to the exclusion of other States such as Venezuela) to the petroleum resources within those 200 nautical miles, some of which ExxonMobil and its partners have discovered and have been granted the legal right to develop and extract?

Do all relevant stakeholders know that the petroleum legislation under which ExxonMobil and its partners commenced exploration and exploitation of petroleum in Guyana (the Petroleum (Production) Act, Cap 65:05, and the Petroleum (Exploration and Production) Act, Cap 65:04) were passed decades before oil production commenced (1939 and 1986 respectively)?

Both Acts have since been repealed and replaced by the Petroleum Activities Act 2023 (Act No. 17 of 2023), but there has not been much reporting on innovations of the 2023 legislation, including section 94, an innovation deemed necessary by Government to ensure it is named in proceedings targeting petroleum operations.

Recently, it was reported that ExxonMobil and Ramps Logistics have been charged in Guyana for making false declarations to the Guyana Revenue Authority (GRA), Guyana tax authority. Only four of the nine reports from nine different media outlets stated that the charges were brought under the Customs Act 82:01. Is this known?

Finally, Guyana’s oil and has sector has faced, and continued to face legal challenges, as the environment lobby in Guyana has become more active. While these actions have been reported, those reports often lack the detail and simplicity needed to allow stakeholders to understand the allegations, decisions, and the implications of those decisions.

With this column, we will attempt to address the aforementioned issues, key among them being increasing literacy regarding the legal framework regulating Guyana’s oil and has sector. I say “we” instead of “I” since I will need your assistance.

Yes. I have ideas of what I want to say, and or shed light on, but ultimately, this column is for the public, so, welcome your suggestions as we take this step.

About the Author

Chevy Devonish is a Senior Legal Advisor at the Attorney General’s Chambers, a Legal Advisor at the Ministry of Parliamentary Affairs and Governance, a lecturer at the University of Guyana, and has worked as a legislative analyst. He can be reached at [email protected]

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